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Full text of "ANNUAL REPORT - ONTARIO ENERGY BOARD (fiscal year ended March 31, 1982)"

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Government 
PubBcatioo* 







Ontario 



Qntario 
Energy 
Board 



ANNUAL REPORT 



Fiscal Year Ended March 31, 1982 





Enerqy 
So Ontario 

Ministry Queen's Park 

Toronto, Ontario 

0* M7A 2B7 

416/965-2041 
Telex 06217880 



June 14, 1982 



Energy 



TO THE HONOURABLE JOHN BLACK AIRD 
O.C., Q.C., B . A . , LL.D. 



Lieutenant Governor of the Province of Ontario 



MAY IT PLEASE YOUR HONOUR: 

I take pleasure in submitting the 
Twenty Second Annual Report of the Ontario Energy 
Board for the fiscal year ended March 31, 1982. 

Respectfully submitted, 

'■C 



Robert Welch 
Minister of Energy 




Ontario 



of the Ontario 416/963-0815 9th Floor 

man Fnorm/ 14 Carllon street 

energy Toronto Ontario 

Board msb U2 



June 7, 19 8 2 



Honourable Robert Welch, Q.C. 
Minister of Energy 
Queen's Park 
Toronto, Ontario 
M7A 2B7 



Dear Minister: 



I have the honour to present herewith the 
Annual Report of the Ontario Energy Board for 
the fiscal year ended March 31, 1982. 



Respectfully submitted, 




Robert H. Clendining 
Chairman 




Ontario 



Ontario 
Energy 
Board 



ANNUAL REPORT 



Fiscal Year Ended March 31, 1982 



Copies available at $2. 50 each from the Ontario Government 
Bookstore, 880 Bay Street, Toronto; telephone (416) 965-2054. 

Out-of-town customers please write (enclosing cheque or money 
order payable to the 'Treasurer of Ontario') to Ministry of 
Government Services, Publications Services Section, 5th Floor, 
880 Bay Street, Toronto, Ontario M7A 1N8. 

Telephone: (416) 965-6015 

Toll-free long distance 1-800-268-7540 
Northwestern Ontario 0-Zenith 67200 



ISSN 0317-4891 6C 6:82 



CONTENTS 



Page 



INTRODUCTION 1 

Role of the Board 1 

Major Activities of the Board • • • 2 



REGULATORY HEARINGS 3 



Natural Gas Rates 3 

Introduction 3 

The Consumers 1 Gas Company Limited 5 

Inter-City Gas Corporation 6 

Natural Resource Gas Limited 7 

Northern & Central Gas Corporation Limited .... 7 

Tecumseh Gas Storage Limited 8 

Union Gas Limited 9 

Wellandport Gas Limited H 

Gas Storage n 



Pipeline Construction u 

Pipeline Exemptions 12 

Arbitration 12 

Accounting Orders 12 

Certificates and Franchises 13 

ADVISORY HEARINGS 14 

Ontario Hydro I 4 

OTHER MATTERS 16 

Ontario Pipeline Coordination Committee 16 

Administration 17 



APPENDICES 

'A' Jurisdiction of the Board 

'B-1' Residential Rates Changes Granted 

- The Consumers' Gas Company Limited 

'B-2' Residential Rates Changes Granted 

- Northern and Central Gas Corporation Limited 

'B-3' Residential Rates Changes Granted 

- Union Gas Limited 

'C Principal Natural Gas Pipelines in Ontario 

'D' Selected Statistics 

t f - Major Ontario Natural Gas Utilities 

E' Brochure 

- "How Does a Gas Utility Change Its Rates? 



Metric Conversion 

Many of the quantitative references in this Report are 
expressed in metric units. The following conversion 
table is provided for your convenience. 

3 
1 cubic metre (m ) =0.0353 thousand cubic feet(Mcf) 

3 
1 thousand cubic feet (Mcf ) =28 . 328 cubic metres (m ) 

3 3 
1 thousand cubic metres (10 m ) =0.0353 million cubic feet(MMcf) 

3 3 
1 million cubic f eet (MMcf ) =28. 328 thousand cubic metres (10 m ) 

1 kilometre (km) =0 . 6214 miles 

1 mile=1.609 kilometres (km) 



INTRODUCTION 

Role of the Board 

The Ontario Energy Board has jurisdiction over 
energy-related matters including regulation of natural gas 
rates, municipal franchise approvals, hydrocarbon pipeline 
construction and related environmental concerns, expro- 
priations and control of utility accounting procedures. 

No natural gas utility operating in Ontario under the 
Board's jurisdiction can change its rates, construct 
certain facilities or enter into franchise agreements with 
municipalities without first obtaining the approval of the 
Board through the public hearing process. 

Upon reference being made to it, the Board also acts 
in an advisory role to the Minister of Energy with regard 
to Ontario Hydro, to the Minister of Natural Resources 
respecting certain oil and gas production concerns, and to 
the Lieutenant Governor in Council on other energy 
matters . 

Appendix 'A' contains a more complete outline of the 
jurisdiction of the Board. 



Major Activities of the Board 

The major activities of the Board continued to be 
rate-related matters resulting from the rapidly increasing 
wholesale price of natural gas from Western Canada and the 
cost of distributing it to customers. 

Ontario natural gas utilities came before the Board 
with a total of 22 main and interim applications for rates 
changes during the fiscal year. These, and 14 other 
proceedings, including a reference from the Minister of 
Energy with respect to Ontario Hydro's bulk power rates, 
are described in greater detail in this Report. 

Further to information in the previous Annual Report, 
the Board continued with its efforts to streamline the 
regulatory process. In conjunction with a review by 
consultants, a number of changes are being implemented 
including an attempt to schedule in advance the entire 
process, from filing of an application to issuance of a 
final order, within a specified period of time. This 
approach is now being tried on an experimental basis. 

In order to assist natural gas users and the public 
in general to better understand the rates setting process, 
the Board published a brochure entitled, "How Does a Gas 
Utility Change Its Rates?" The brochure has been sent to 
Members of the Legislature, all Ontario municipalities and 
others, including the media. A copy of the brochure, 
available to anyone, is enclosed with this Report. 



REGULATORY HEARINGS 



Natural Gas Rates 
Introduction 

An understanding of the elements affecting the supply 
and pricing of natural gas distributed and sold in the 
Province is helpful in a review of natural gas rates 
hearings. While some natural gas is produced in Ontario 
the largest portion (approximately 98 per cent) is 
delivered from Western Canada by TransCanada PipeLines 
Limited. Ontario natural gas utilities must purchase most 
of their supply from this source. 

There are two principle causes of increasing natural 
gas prices in Ontario. The most frequent, and the 
largest in dollar terms, is the cost of gas. This is a 
combination of the wholesale price of natural gas 
delivered from Western Canada, as determined by the 
Federal government, plus the excise or natural gas tax 
which the Federal government is now imposing, in increas- 
ing amounts, on top of the wholesale purchase price. 

The second major cause is the revenue required by 
Ontario natural gas utilities to operate their companies, 
to raise necessary capital and to provide service to their 
customers in a safe and efficient manner. These 
in-province distribution costs, are a relatively small 
component of the rates paid by customers. Ironically, it 
is these costs which are the subject of much scrutiny at 
public hearings. On the other hand, the sizeable Federal 
gas costs are generally straight forward and hearings 
related solely to them are usually short. 



Before these Federally imposed gas cost increases can 
be passed through to customers, Provincial legislation 
requires that approval be obtained from the Ontario Energy 
Board. The Board must be satisfied that these costs 
warrant being passed through and determine whether the 
utility can absorb some or all of the cost. In recent 
years all such gas cost increases have been passed on to 
the customers. 

These increases affect residential customers as well 
as commercial and industrial gas users. 

In the next year, the Federal government will 
continue with its program of increasing natural gas costs 
and excise taxes. This is apart from any revenue 
increases which the Ontario natural gas utilities may 
request to maintain their financial integrity. All of 
these increases, regardless of cause will, however, be 
subject to the Board's approval process. 

During the fiscal year increases in the cost of 
natural gas imposed on the gas utilities by the Federal 
government were as follows: 

Effective Dat e Amount of Increase Reason 

May 1, 1981 $5.30 per 10 3 m 3 natural gas tax 

July 1, 1981 $5.30 per 10 3 m 3 natural gas tax 

February 1, 1982 $7.77 per 10 3 m 3 natural gas tax 

February 1, 1982 $9.88 per 10 3 m 3 wholesale gas costs 

The major natural gas utilities (The Consumers' Gas 
Company Ltd., Northern and Central Gas Corporation Limited 
and Union Gas Limited) now file their rates in metric 
units. All residential rates changes granted to each of 
these utilities during the fiscal year, are shown in 
Appendix 'B ' . 



The following are highlights of rates cases dealt 
with by the Board during the fiscal year. 

The Consumers' Gas Company Ltd. 

L, Consumers' distributes natural gas in parts of 
southern and eastern Ontario, including Metropolitan 
Toronto. It also operates under the names of Brockville 
Gas, Grimsby Gas, Ottawa Gas and Provincial Gas. 

By Ontario Regulation 330/81 the Lieutenant Governor 
in Council permitted Hiram Walker Resources Ltd. to 
acquire all the shares of Hiram Walker-Consumers Home 
Ltd. in exchange for its own shares. The natural gas 
distribution operations of Hiram Walker-Consumers Home 
Ltd. became a wholly-owned subsidiary of Hiram Walker 
Resources Ltd. under the name of The Consumers' Gas 
Company Ltd . 

In its decision of January 27, 1982, on Consumers' 
main rates application, the Board found a revenue 
deficiency of $77.6 million. The Board had allowed 
$50.9 million of this on an interim basis effective 
October 1, 1981 at the same time as a gas cost increase. 
The balance of $26.7 million resulted in rates increases 
in February 1982, at which time increases in the Toronto 
city-gate price of natural gas and Federal natural gas 
taxes also became effective. 

Consumers' proposed capital expansion program was one 
of the major issues in this hearing. The Board approved 
Consumers' tighter feasibility criteria reflecting the 
very high cost of money, and stated that in the present 
capital market it would be prudent and necessary 



for utility management to restrain capital expansion 
spending. The Board also determined that contributions in 
aid of construction must be obtained from new customers 
before undertaking system expansion that does not meet the 
feasibility test. 

Following the Board's decision, members of the 
Ontario New Democratic Party petitioned the Lieutenant 
Governor in Council to lower or postpone the February 1982 
rates increases resulting from the revenue deficiency. 
The petition was pending at the end of the fiscal year. 

A new main rates application was filed by Consumers' 
near the end of the fiscal year and will be heard this 
year. 

Inter-City Gas Corporation 

Inter-City is a Manitoba utility which also distri- 
butes gas in and west of Fort Frances, Ontario. 

Inter-City was granted the following interim rates 
increases during the fiscal year: 

Amount of 
Effective Date Increase Reason 

May 1, 1981 15.1$ per Mcf Federal natural gas tax 
July 1, 1981 15.1cf per Mcf Federal natural gas tax 
August 1, 1981 2.72<p per Mcf revenue deficiency 
February 1, 1982 4 6.57cf per Mcf wholesale gas costs and 

Federal natural gas tax 

The Board also approved rates under which Inter-City 
would provide temporary winter service to Boise Cascade 
Canada Limited from November l f 1981, to April 1, 1982. 

The hearing of Inter-City's main rates application 
was completed in January 1982 and the decision was pending 
at the end of the fiscal year. 



Natural Resource Gas Limited 

Natural Resource Gas (NRG) is a small utility serving 
Aylmer and surrounding communities. It purchases its 
natural gas supply from Union Gas, Consumers' Gas and 
local producers. 

NRG filed a main rates application in November 1981. 
After three days of hearings in February 1982, the matter 
was adjourned pending the request and filing of further 
information. 

During the fiscal year NRG was granted the following 
interim rates increases: 

Amount 
Effective Date of Increase Reason 

August 1, 1981 9cf per Mcf Federal natural gas tax 

October 5, 1981 21<p per Mcf wholesale gas costs 

December 1, 1981 31cf per Mcf revenue deficiency 

February 1, 1982 19<f per Mcf wholesale gas costs and 

Federal natural gas tax 

March 1, 1982 43<p per Mcf wholesale gas costs 

March 19, 1982 40<f per Mcf revenue deficiency 

Northern and Central Gas Corporation Limited 

Northern and Central distributes natural gas in parts 
of northern and southeastern Ontario. 

In its decision of June 15, 1981, on Northern and 
Central's main rates application, the Board found a 
revenue deficiency of $7.9 million. This resulted in 
rates increases on that date followed by further increases 
in July 1981 resulting from Federal natural gas taxes. 
(An earlier Federal gas tax increase had resulted in an 
increase on May 1, 1981.) 



A major issue in this case was the regulatory treat- 
ment relating to the Atikokan pipeline; wherein two large 
volume industrial customers using this pipeline had ceased 
operations, one late in the test year and the other in the 
following year. The Board concluded that there was insuf- 
ficient evidence to support the exclusion of a major 
portion of the cost of the pipeline from the rate base on 
the basis that it was not "used or useful" in the test 
year. The Board, however, refused Northern and Central's 
request that sales revenues be normalized by eliminating 
$10.3 million, the revenue from sales to the two customers 
in the test year. 

Northern and Central filed a new main rates applica- 
tion in November 1981. It included a request for interim 
rate relief due to a revenue deficiency which Northern and 
Central said would be incurred in 1982. In an interim 
decision the Board found a revenue deficiency of $4.5 mil- 
lion and approved rates increases effective March 1, 
1982. This followed a substantial increase on February 5, 
1982 related to gas costs and natural gas taxes. 

Tecumseh Gas Storage Limited 

Tecumseh does not distribute natural gas but provides 
underground gas storage facilities in Lambton County to 
The Consumers' Gas Company Ltd. 

The decision in Tecumseh's first main rates 
application was released during the fiscal year. The 
Board found a revenue deficiency of $943,584 based on 
fiscal 1980 and increased Tecumseh's rates accordingly, 
effective November 1, 1981. 



The major issue in the case was the amount to be 
included in rate base for storage pools purchased by 
Tecumseh. The Board determined a rate base component 
$1.6 million less than the figure proposed by Tecumseh. 
Tecumseh filed a new application towards the end of the 
fiscal year. 

Union Gas Limited 

"Union distributes natural gas in most of southwestern 
Ontario. 

In its decision of September 14, 1981, on Union's 
main rates application, the Board found a revenue 
deficiency of $15.1 million. This resulted in rates 
increases on October 5, 1981, at which time increases in 
Federal natural gas taxes also became effective. 

Rate of return, meter reading, billing procedures and 
security deposits for residential customers, were major 
issues at this hearing. The Board ordered Union to file 
before its next main rates hearing a report examining 
methods of improving its capability of checking natural 
gas bills for over-estimates and meter reading errors. 
Union was also ordered to report, at the next main 
hearing, on the progress of its test of a micro-processor 
meter reading system. The Board also directed Union to 
undertake an information program to advise residential 
customers of matters that can affect their credit rating 
and the need for security deposits. 

Union's application for increased rates, in order to 
pass on to its customers $24.5 million in premium costs of 
synthetic natural gas purchased from Petrosar Limited, was 
heard during the fiscal year. The major issue in the case 



10 



was whether Union's directors and management acted pru- 
dently in entering into a synthetic natural gas purchase 
contract with Petrosar Limited in 1974. While being 
critical of Union's directors and management, the Board 
determined that under the circumstances as they were known 
to exist in 1974 their action or inaction did not consti- 
tute imprudence. The Board permitted amortization of the 
premium over four years but, to provide incentive for 
Union's management to continue its efforts to mitigate the 
effect of the premium costs, rejected Union's proposal 
that there should be a return or interest on the unamor- 
tized portion. The decision resulted in uniform rates 
increases effective February 1, 1982. 

One month later, Federal natural gas taxes and gas 
costs resulted in another rates increase. 

Leave to appeal the Board's decision in the Petrosar 
case to the Divisional Court has been filed by Dow 
Chemical Canada Inc. The matter was pending at the end of 
the fiscal year. 

During the fiscal year the Board extended the rates 
to be paid by Union for storage in the Bickford and Sombra 
Pools, and approved rates to be charged to Consumers' by 
Union under the short-term gas storage agreement referred 
to in the Gas Storage section of this Report. 

A new main rates application was filed by Union in 
October 1981. It was heard in January and February 1982 
and the decision was pending at the end of the fiscal 
year. 



11 



Wellandport Gas Limited 

Wellandport is a small natural gas utility serving 
customers in the Townships of West Lincoln and Wainfleet 
in the Regional Municipality of Niagara. It produces most 
of its own natural gas but also purchases some from Union 
Gas Limited. 

The Board issued an interim order increasing 
Wellandport ' s rates by about $1.40 per Mcf for gas billed 
on and after December 1, 1981, due to increased Federal 
natural gas taxes, gas purchase costs and operating costs. 

Gas Storage 

The Board approved the parties, term and storage 
volume of a proposed short-term gas storage agreement 
whereby Union would store natural gas for Consumers 1 . The 
Board also approved a proposed change in the volume being 
stored by Union for the Kingston Public Utilities 
Commission. 

Pipeline Construction 

The Board granted Union Gas Limited leave to 
construct the following three looping sections of its 
existing Dawn-Trafalgar transmission pipelines: 

Distance 
London valve site in the Township of 
London to St. Marys valve site in 
the Township of West Nissouri 14 km 

Kerwood valve site in the Township of 

Metcalfe to Strathroy gate station 

in the Township of Caradoc 11 km 

Bright compressor station in the 

Township of Blandf ord-Blenheim to 

Owen Sound valve site in the 

Township of North Dumfries 18 km 



12 



Leave was granted subject to certain conditions relating 
primarily to environmental matters. 

Pipeline Exemptions 

In special circumstances the Board may exempt a 
person from obtaining leave to construct a particular 
transmission pipeline. Two exemption orders were made 
during the fiscal year: 

Union Gas was granted an exemption to replace three 
short sections of the Amherstburg line in the 
Township of Anderdon, County of Essex; and 

an amendment was made to a portion of the route of a 
15-kilometre line from the City of Sudbury to the 
Town of Rayside-Balfour for which Northern and 
Central was granted an exemption in the previous 
fiscal year. 

Arbitration 

Proceedings in the application to determine compensa- 
tion payable by Union Gas to the owners of oil and natural 
gas and storage rights in the Bentpath Pool in the 
Township of Dawn, were outlined in the Board's previous 
Annual Report. In the fiscal year just ended, the Board 
consolidated two other applications with the compensation 
proceeding and dealt with further procedural matters. The 
hearing began on December 1, 1981, and ended on March 4, 
1982, after 16 sitting days. Written argument has been 
completed and the Board will render its decision this 
year. 

Accounting Orders 

In April 1981 the Board issued to Union Gas Limited 
an accounting order determining the appropriate accounting 
treatment of the 5 per cent Federal income tax surcharge. 



13 



Certificates and Franchises 

The Board granted 14 certificates of public conveni- 
ence and necessity to construct works and supply natural 
gas as follows: 

Consumers 1 Gas - City of Oshawa; Town of Whitby 
Natural Resource Gas - Town of Aylmer; Villages of 

Belmont, Port Burwell, 
Springfield and Vienna; Town- 
ships of Bayham, Norfolk, North 
Dorchester, South Dorchester, 
South West Oxford and 
Westminster 
Union Gas - Township of Stanley 

The Board also approved or prescribed the terms and 
conditions of 18 franchises for the distribution of natural 
gas as follows: 

Consumers' Gas - Cities of Oshawa, Ottawa and 

St. Catharines 
Natural Resource Gas - (same municipalities as above) 
Northern & Central - District Municipality of 
Gas Muskoka* 

Union Gas - City of St. Thomas; Townships 

of Stanley* and Zorra* 

In its reasons for decision in the Ottawa franchise 
matter the Board reaffirmed the principle that franchise 
agreements should not contain terms and conditions 
requiring payments from a distributor to the municipality 
over and above the normal municipal taxes. 



'municipalities franchised for the first time. 



14 



ADVISORY HEARINGS 

The Board's advisory role differs from its regulatory 
role which includes the authority to order Ontario natural 
gas utilities to implement Board decisions. In its 
advisory capacity, the Board reviews at public hearings 
such matters as Ontario Hydro bulk power rate proposals 
and makes a report containing recommendations. 

Ontario Hydro 

^In April 1981 the Minister of Energy referred to the 
Board for examination and report, a proposal by Ontario 
Hydro to increase its rates effective January 1, 1982. 
Ontario Hydro proposed a 1982 revenue requirement of 
$2,862 million and an average bulk power rates increase of 
8 . 6 per cent . 

The hearing was held in June and July and the Board 
made its report on August 31, 1981. It contained the 
following opinions and recommendations: 



Recommendations and findings 
relating to the 1982 rate proposal 

1) Ontario Hydro's forecast of bulk power costs for 1982 
is excessive by an amount of $85.3 million. 

2) After taking into account the revisions made by 
Ontario Hydro to its proposal, the bulk power rates 
increase for 1982 should be approximately 6.5 per 
cent. 

3) All proposed bulk power rates for 1982 should be 
adjusted downward by Ontario Hydro in an equitable 
manner to the level indicated. 

4) Decommissioning costs should be based on restricted 
site use and be subject to further review as may be 
necessary. 

5) Ontario Hydro's accounting policy to amortize gains 
or losses on premature retirement of debt should be 
deferred until the matter can be re-examined more 
fully at the next bulk power rates hearing. 

6) The electric furnace rates differential in 1981 
should be continued in 1982. 



15 



Recommendations relating to future hearings 

1) Staff levels of Ontario Hydro should be included and 
disclosed in the supporting detail of Ontario Hydro's 
bulk power rates proposal. 

2) Early completion of the development and application 
of performance indices on a remuneration related 
basis should be accorded a higher priority by Ontario 
Hydro. 

3) Ontario Hydro should consider deferring more planned 
outages at Pickering Nuclear Generating Station on 
existing units until Pickering Units 5 and 6 come 
into service in 1983. 

4) Commissioning of Pickering Units 5 and 6 should be 
expedited to the utmost. 

5) All revenue accounts such as internal sales should be 
shown separately and not netted out. 

6) An examination of capital expenditure and capital 
cost control should be undertaken by the Ontario 
Energy Board in the near future. 

7) Ontario Hydro should pursue its study on cash manage- 
ment. 

The Board also recommended that Section 62 of the 
Power Corporation Act be amended to increase the rate of 
interest chargeable on overdue accounts to more realistic 
levels. 



16 



OTHER MATTERS 

Ontario Pipeline Coordination Committee (OPCC) 

The OPCC is comprised of representatives from the 
Ministries of Agriculture and Food, Consumer and Commer- 
cial Relations, Environment, and Natural Resources and is 
chaired by the Board's Special Projects Officer. Other 
Ministries, such as Citizenship and Culture, Municipal 
Affairs and Housing, and Energy, participate depending 
upon the impact of specific pipeline projects. 

The purpose of the OPCC is to ensure that pipelines 
have minimal undesirable effect on the land by requiring 
that: 

sensitive areas be avoided in route selection; 
landowners be adequately notified and informed; 
construction procedures and schedules be 
developed to cause the least disturbance to the 
right-of-v/ay and surroundings; and 
clean-up and restoration measures be responsibly 
implemented to restore the right-of-way to as 
good a condition as existed before the project 
was started. 

During the fiscal year, the OPCC assisted Board 
counsel during the hearing of pipeline applications and 
recommended conditions of approval to the Board. It also 
monitored construction and site restoration to ensure that 
the conditions of Board orders were implemented. 

In addition, the OPCC assisted the Ministry of Energy 

before the National Energy Board during the hearing of 
TransCanada PipeLines 1 application to build a large 
diameter, high pressure natural gas transmission line from 

North Bay to Morrisburg. Construction, in Ontario, of 

Federally regulated pipelines was also monitored by the 
OPCC. 



17 



There are over 13,000 kilometres of transmission 
pipeline in Ontario transporting natural gas, crude oil 
and petroleum products. During the fiscal year the OPCC 
was involved in monitoring various stages of construction 
of some 760 kilometres of natural gas pipeline. 
Appendix "C shows the general location of these pipeline 
systems . 

Administration 

The Board's total (unaudited) expenditures for the 
fiscal year were $1,863,015 of which $472,321 was 
recovered from applicants by way of fees and costs, and 
paid into the Consolidated Revenue Fund of the Province. 



At the end of the fiscal year the staff of the Board 
totalled 32. Board members and senior staff were: 
R. H. Clendining - Chairman 



I. C. MacNabb 

S. J. Wychowanec 

H. R. Chatterson 

J. R. Dunn 

D. H. Thornton 

D. M. Treadgold 

J. C. Butler 

R . R . Pe rd ue 

0. J. Cook 

P. F. Cunningham 
S.A.C. Thomas 
L. Graholm 
D. R. Cochran 
C. J. Mackie 



Vice Chairman 

Vice Chairman 

Member 

Member 

Member 

Member 

Part-time Member 

Part-time Member 

(Acting) Director of Operations 
(also Manager, Financial Analysis 
and Energy Returns Officer) 

Administrative Advisor 

Board Secretary 

Board Solicitor 

Special Projects Officer 

Manager, Engineering 



Appendix 'A' 



Jurisdiction of the Board 

Under the Ontario Energy Board Act 

Approving or fixing rates and other charges for the 
sale of gas by transmitters, distributors and storage 
companies and for the transmission, distribution and 
storage of gas. 

Ensuring compliance by gas utilities with the Uniform 
System of Accounts. 

Granting leave to construct pipelines and related 
facilities . 

Granting authority to expropriate land for pipelines 
and related facilities and authorizing pipelines to 
cross highways, utility lines and ditches. 

Recommending to the Lieutenant Governor in Council 
the creation of designated gas storage areas and 
authorizing their use and arbitrating compensation 
payable to landowners under certain conditions. 

Approving gas storage agreements and permitting a 
transmitter or distributor to use the empty space of 
a storage company. 

Unitizing the interests in gas and oil spacing units 
and pools. 

Reporting to the Lieutenant Governor in Council, 
after hearings, on applications by gas utilities to 
sell their assets or amalgamate with other utilities 
and on applications by persons to acquire shares of a 
gas utility which would result in a holding of more 
than 20 per cent of such shares. 

Reporting to the Lieutenant Governor in Council on 
energy questions referred to the Board. 



Appendix 'A' 



Examining into and reporting to the Minister of 
Energy on Hydro rates and rate-related matters, 
pursuant to references from the Minister. 

Under the Municipal Franchises Act 

Approving the terms of a proposed by-law granting a 
franchise to supply gas to a municipal corporation or 
distribute gas in the municipality, and extending the 
term of such franchise or of a transmission 
franchise . 

Granting certificates of public convenience and 
necessity to construct works and supply gas in 
municipalities. 

Under the Petroleum Resources Act 

Reporting to the Minister of Natural Resources, 
pursuant to references from him, on certain applica- 
tions for permits and licences. 

Under the Public Utilities Act 

Controlling gas utilities that contravene municipal 
by-laws prohibiting the distribution and sale of gas 
containing sulphuretted hydrogen. 

Under the Assessment Act 

Deciding whether certain gas pipelines are transmis- 
sion lines for assessment purposes. 



The Toronto District Heating Corporation Act, 1980* 

Fixing steam rates for certain customers of the 
Toronto District Heating Corporation, formerly the 
Toronto Hospitals Steam Corporation, upon appeal by 
the customer. *(This Act was passed in the previous 
fiscal year but had not been proclaimed by March 31, 
1982. ) 



Appendix 'B-1' 



NATURAL GAS RATES CHANGES GRANTED 

FOR TYPICAL RESIDENTIAL CUSTOMERS 

(FISCAL YEAR APRIL 1, 1981 TO MARCH 31 , 1982) 

($ per 10 3 m 3 ) 

The Consumers ' Gas Company Ltd . 

Effective Date Amount Reason 

October 1, 1981 $14.47 revenue deficiency 

October 1, 1981 10.94 Federal natural gas tax 

February 17, 1982 6.71 revenue deficiency 

February 17, 1982 9.88 wholesale gas costs 

February 17, 1982 8 . 47 Federal natural gas tax 

$50.47 Total 



Percentage increase: 33 per cent 

Base rate level at March 31, 1981*: $151.09 

Current rate level at March 31, 1982*: $201.56 



*Based on representative annual residential 
consumption for space and water heating of 4.25 lO^nw 



Appendix ' B-2' 



NATURAL GAS RATES CHANGES GRANTED 
FOR TYPICAL RESIDENTIAL CUSTOMERS 
(FISCAL YEAR APRIL 1, 1981 TO MARCH 31 , 1982) 

($ per 10 3 m 3 ) 



Northern and Central Gas Corporation Limited 

Amount 

Western Northern Eastern 
Effective Date Zone Zone Zone Reason 



May 1, 1981 $ 5.30 $ 5.30 $ 5.30 Federal natural gas tax 

revenue deficiency 
Federal natural gas tax 
wholesale gas costs 
Federal natural gas tax 
revenue deficiency 



June 15, 1981 


9.18 


9.18 


9.18 


July 1, 1981 


5.30 


5.30 


5.30 


February 5, 1982 


9.53 


10.59 


11.30 


February 5 f 1982 


7.77 


7.77 


7.77 


March 1, 1982 


3.18 


3.18 


3.18 



$40.26 $41.32 $42.03 Total 



Percentage 30 29 28 

increase: per cent per cent per cent 

Base rate level at 

March 31, 1981*: $135.91 $141.91 $148.26 

(Current rate level at 

March 31, 1982*: $176.17 $183.23 $190.29 



* 



Based on representative annual 

residential consumption for 
space heating and water 

heating of 4.40 4.24 3.66 

10 3 m 3 10 3 m 3 10 3 m 3 



Appendix 'B-3' 



NATURAL GAS RATES CHANGES GRANTED 
FOR TYPICAL RESIDENTIAL CUSTOMERS 
(FISCAL YEAR APRIL l r 1981 TO MARCH 31 , 1982) 

($ per 10 3 m 3 ) 



Union Gas Limited 

Reason 

revenue deficiency 
revenue deficiency 
Federal natural gas tax 
Petrosar gas costs 
wholesale gas costs 
Federal natural gas tax 



Effective Date 


Amount 


April 1, 1981 


$(0.71 


October 5, 1981 


5.30 


October 5, 1981 


10.95 


February l r 1982 


1.06 


March 1, 1982 


9.53 


March 1, 1982 


8.83 



$34.96 Total 



Percentage increase: 22 per cent 

Base rate level at March 31, 1981*: $159.21 

Current rate level at March 31, 1982*: $194.17 



*Based on representative annual residential 
consumption for space and water heating of 3.54 10 3 m 3 



Appendix 'C 



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Appendix ' D' 



SELECTED STATISTICS 
MAJOR ONTARIO NATURAL GAS UTILITIES* 



1982 



1981 



Number of Customers ; 

Residential 

Commercial & Industrial 

Total 



( rounded ) 



1,142,600 

136,800 

1,279,400 



1,063,600 

127,700 

1,191,300 



Sales Volume ; (10 3 m 3 ) 

Residential 

Commercial & Industrial 

Total 



3,987,100 
14,650,400 
18,637,500 



3,853,900 
14,490,700 
18,344,600 



(MMcf) 

Residential 

Commercial & Industrial 

Total 



140,700 
517,200 
657,900 



136,000 
511,500 
647,500 



Sales Revenue ; ($000) 

Residential 

Commercial & Industrial 

Total 



623,300 
1,714,800 
2,338,100 



512,800 
1,391,100 
1,903,900 



Total Distributors' 

Cost of Natural Gas ; ($000) 1,894,700 1,553,700 

Rate Base ; ($000) 1,828,500 1,776,200 

Revenue Increases 

( non gas costs) ; ($000) 

Requested 146,100 72,700 

Granted 105,200 35,000 

Transmission and Distribution Pipelines ; 

Miles 22,900 22,400 

Kilometers 36,900 36,000 



*The Consumers' Gas Company Ltd. 
Northern and Central Gas Corporation Limited. 
Union Gas Limited. 



decision can be changed 

Dard decisions may be challenged in three dif- 
rent ways: 

the Board may itself review a decision either 
Don the application of any interested party or 
Don its own initiative; 

interested parties may, within twenty-eight 
ays of a decision, petition the Cabinet of the 
ntario government to review it; or 
upon questions of law or jurisdiction, appli- 
ition for judicial review may be made to the 
livisional Court. 




)ther matters 



he Ontario Energy Board is responsible for 
lore than just natural gas rates. It regulates 
ther matters relating to the oil and gas industry, 
lduding pipeline construction and gas distribu- 
on franchises. 

The Board also reviews annually the wholesale 
ites proposed by Ontario Hydro and makes 
bitten recommendations on them to the Min- 
ter of Energy. The Board does not, however, 
°view the rates of municipal electric utilities. 

A more precise explanation of the Board's 
uthority and procedures may be found in the 
)ntario Energy Board Act and Regulations, the 
lunicipal Franchises Act, and the Petroleum 
esources Act. 



; or further information, please contact: 

toard Secretary 

Ontario Energy Board 

4 Carlton Street, 9th Floor 

Toronto, Ontario 

/I5B 1J2 

telephone (collect): 416/963-0812 




Ontario 



Ontario 
Energy 
Board 



12/1981 




I 



How to intervene 

Within the period specified in the notice, usually 
two weeks, the prospective intervenor must 
inform the Board in writing of the intention to 
intervene, sending a copy to the gas utility's 
lawyers as well. 

The intervenor should say if he or she wishes 
to appear at the hearing. Recognizing that some 
people cannot attend at all stages or arrange for 
someone to be present on their behalf, the Board 
Secretary will try to arrange a time when a partici- 
pant may be heard. 

Although it is sometimes mote effective to 
appear in person (or be represented by a lawyer, 
agent, or a group spokesman), a simple interven- 
tion can be made by writing a letter to the Board 
Secretary for presentation at the hearing. 

Whether a letter is written for filing at the 
hearing or a party wishes actually to participate, 
the written notice of intervention should indicate 
why the person has an interest in the outcome of 
the hearing and the reasons for supporting or 
opposing the gas utility's application. A written 
submission providing other details may also be 
helpful. An intervenor may file his submission 
later, after requesting and reading the utility's 
pre-filed evidence. 

Board staff and counsel are available to assist 
the public to intervene. The Board Secretary 
should be contacted if assistance is required. 

Once the date and location of the hearing have 
been established, the Board Secretary will 
arrange for the inter venors to be notified. 

Pre-hearing conferences 

It is often helpful if participants hold a meeting 
to review the material for clarification, to define 
their differences, and to arrange procedural mat- 
ters before the hearing. All interveners receive 
notice of, and are encouraged to attend, these 
public conferences. 



The hearing 



Anyone is welcome to attend a hearing, \| 
may last from a few days to several weeks. I 
ings are usually held in the Board officl 
Toronto. 

At the hearing the utility must prove til 
needs the rate changes applied for. The ll 
usually hears the utility's evidence first. II 
venors may ask questions of the utility witrl 
or make their views known by giving evidenl 
by presenting a submission, or all three. Pe 
giving evidence can be questioned by all pa 
pants at the hearing, including lawyers repre 
ing the utility, Board staff, and the B 
members themselves. 

A transcript of the hearing is taken. A co 
available at the Board offices for inspectio 
any member of the public. 

Interim hearings 

If a gas utility believes that a change in its co 
buying gas or in other costs of doing business 
cause it to suffer immediate financial difficul 
it can apply for an interim rate change. T 
interim rate applications also require public h 
ings, which last only a day or so. When int< 
rate changes are granted they are still subjec 
review at the main hearing. 

After the hearing 

The Board's decision and order 

After hearing all evidence and submissions, 
Board members who heard the case delibe 
and make a decision. The Board's decision is t 
written and released. 

The Board may deny the rate change 
quested, grant a portion of it, or approve 
entire request if it is justified. The decisiot 
accompanied by reasons for decision. 

Finally, a Board order is issued, and the i 
changes become effective. All participants re« 
copies of the decision and order, which are < 
available to the public. 



JUN 3 1992